BlackRock Tokenized Fund Now Pushed To Hit $2 Trillion Market

Key Points:

• A CFTC subcommittee approved guidelines allowing tokenized shares from firms like Franklin Templeton and BlackRock to be used as collateral in trading.
• BlackRock tokenized fund surpassed $500 million in assets within four months, with support from DeFi projects and digital asset brokerages.

According to Bloomberg, the attempts to progress the trading by Franklin Templeton and BlackRock tokenized funds have highly improved.

Read more: BlackRock BUIDL Fund Investors Now Supported Transfer USDC By Circle 

CFTC Advances Guidelines for Tokenized Collateral in Trading

A subcommittee on financial issues at the Commodity Futures Trading Commission’s advisory committee on global markets recently approved recommendations that would permit the use of distributed ledger technology to hold and transfer noncash collateral by registered firms. Sources close to the matter, who asked not to be named, said that recommendations would be forwarded to the full committee for consideration later this year.

What’s new is an attempt to expand existing policies to accommodate blockchain in a way consistent with CFTC margin requirements, among other U.S. regulators and their rules regarding derivatives clearing organizations. Once fully approved, this could further accelerate the adoption of tokenization whereby businesses can use tokenized assets as collateral and allow companies to increase capital efficiency.

BlackRock Tokenized Fund Surpasses $500 Million in Assets

McKinsey estimates that, minus the stablecoins, the tokenized market will reach $2 trillion by 2030, likely to be driven by applications such as the tokenization of mutual funds, bonds, exchange-traded notes, loans, and alternative investment funds market size to place it on par with the entire cryptocurrency market today.

In that space, the leading one is BlackRock’s USD Institutional Digital Liquidity Fund, or BUIDL. Running on the Ethereum blockchain, BUIDL tokenizes U.S. dollar yields.

BlackRock tokenized fund just recently became the largest fund, reaching more than $500 million in assets in only four months since its inception. Second place was held by Franklin Templeton’s OnChain U.S. Government Money Fund, launched in April 2021 under the ticker FOBXX, managing over $427 million.

BUIDL was gaining momentum as many DeFi projects, including Ondo Finance and Mountain Protocol, leveraged its tokens as collateral. In addition, FalconX and Hidden Road added BlackRock tokenized fund to the token sets provided for collateral for their clients.